FACTS:

JAKA Foods Processing Corporation (JAKA) terminated the employment of six former employees, Darwin Pacot, Robert Parohinog, David Bisnar, Marlon Domingo, Rhoel Lescano, and Jonathan Cagabcab, on August 29, 1997 due to financial difficulties. However, JAKA failed to comply with the written notice requirement under Article 283 of the Labor Code. The terminated employees separately filed complaints for illegal dismissal, underpayment of wages, and nonpayment of benefits against JAKA.

The Labor Arbiter ruled in favor of the employees, declaring the termination as illegal. The Labor Arbiter ordered JAKA to reinstate the employees with full backwages and other benefits. The National Labor Relations Commission (NLRC) affirmed the Labor Arbiter's decision. JAKA filed a motion for reconsideration, leading to another decision from the NLRC which awarded only separation pay to the employees.

The NLRC denied the employees' motion for reconsideration, prompting them to file a petition for certiorari before the Court of Appeals. The Court of Appeals applied the doctrine established in Serrano v. NLRC and reversed the NLRC's decision. The Court of Appeals reinstated the Labor Arbiter's decision, awarding full backwages and other benefits to the employees.

JAKA's motion for reconsideration was denied by the Court of Appeals, prompting JAKA to file a petition for review on certiorari with the Supreme Court. The main issue presented is the legal implications of a dismissal for cause without compliance with the notice requirement under the Labor Code.

ISSUES:

1. Whether or not the Court of Appeals correctly awarded "full backwages" to respondents.

2. Whether or not the assailed decision correctly awarded separation pay to respondents.

RULING:

1. The Court of Appeals correctly awarded "full backwages" to respondents. In the case of Agabon vs. NLRC, it was held that if the dismissal is for a just cause, the lack of statutory due process should not render it illegal or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights. The indemnity should be stiffer to discourage the abhorrent practice of "dismiss now, pay later." The amount of indemnification or penalty should depend on the facts of each case, considering the gravity of the due process violation.

PRINCIPLES:

• In cases of dismissal for a just cause, lack of statutory due process should not nullify the dismissal.

• However, the employer should indemnify the employee for the violation of his statutory rights.

• The amount of indemnification or penalty should take into consideration the gravity of the due process violation.